Could Smart Meters Destroy the Phone-Cable Duopoly?

The “smart grid” is designed as a way to save money by delivering power consumers real-time data on power pricing.

With most BPL (broadband via power line) trials having ended in failure, due to interference with licensed frequencies caused by running data inside the power line, the obvious solution is to run a fiber line along the right-of-way. Fiber runs data using light, so the interference problem goes away.

But then opportunity comes knocking. To find out how much, head on over to Chattanooga, Tennessee.

There, the municipal-owned Electric Power Board  won approval in 2007 to spend $300 million running optical fiber to all customers in its nine-county service area.

Comcast, sensing something bad was coming, tried to stop the move in the courts, but the system is now live, not only delivering smart meter technology the Department of Energy sees as a model, but serious competition in the phone, cable and Internet space.

The whole thing was funded through a $227 million local bond issue and a $100 million DoE grant, with the utility estimating it could save $300 million in wholesale electricity costs over 10 years using the system. The two-way electrical monitoring should be in place by next year.

The utility says it will not only be in a better position to attract industrial customers, but better manage a grid that has a capacity of 3,000 Megawatts but peak demand less than half that, with 3% of power being lost in inefficient transformers that can now be identified and replaced.

How can it make the numbers work? Well, if you live in Chattanooga right now, you can buy not 1 Mbps service, not 3 Mbps service, but 1 Gbps Internet service. It’s $350 per month, but there are “slower” tiers going down to 30 Mbps, at lower prices. Plus all the cable TV service you can eat. Despite Comcast rolling out its Xfinity service and AT&T delivering its Uverse, the utility claims it already has a 15% penetration rate.

Now maybe you don’t need 1 Gbps service, or even 30 Mbps. But imagine how that 30 Mbps could serve a Starbuck’s, or what that 1 Gbps service could do for a hospital, office building, or apartment complex.

The city’s neighbors are doing more than drooling. They’re following suit. Nine Georgia counties (and three in Alabama) have gotten a Department of Commerce grant, through the stimulus, to extend fiber service.

The roll-out has transformed the city’s reputation, which makes me wonder why more electric utilities aren’t looking to do the same thing. CenterPoint Energy (formerly the regulated side of Reliant) says it trialed the technology on its network, but consumers didn’t buy the extra communications services.  Of course that was early in the decade, before the cable-phone duopoly was fully in place, and you have to ask, did they really try?

So what do you think? Are you ready to have your power company compete with your cable operator? And are you willing to see that investment go into your rate base? Even if it can streamline the electric utility’s operations?

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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog,, in 2007.

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